(Andy Mukherjee is a Bloomberg Opinion columnist. This column first appeared in The Print on August 23, 2021)
- A telecom carrier and a retailer are showing a mirror to India’s tryst with assisted corporate demise and rebirth. The image staring back is one of defeat snatched from the jaws of victory. As the five-year-old bankruptcy experiment flounders, blame it on what development scholars refer to as “isomorphic mimicry”: Emerging economies ape the form of successful Western institutions but leave them dysfunctional and devoid of content, almost guaranteeing their failure. Global investors were genuinely excited by India’s 2016 insolvency law, hoping to profit from the 19 trillion rupees ($260 billion) of bad loans, including those written off by banks in the last eight years. Initial success in finding new homes for distressed steel plants raised hopes that the savings-starved economy would extricate valuable capital from failed ventures. But now, creditors are balking at 90% haircuts, and bailout funds are disillusioned with everything from long delays in admitting cases by tribunals to a chronic shortage of judges…
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